That means the offers won’t be due on Cyber Monday, 27 November 2017, but that was a coincidental, albeit cool, deadline to begin with.

Several companies submitted questions, mostly looking for market data or information about the City of Gonzales’ expectations, assets and permit processes. Links to the two sets of questions and answers are below.

The City’s objective is to deliver a baseline of Internet access to everyone who lives in Gonzales. In return for a bulk monthly fee paid by the City, the selected ISP will deliver a specified level of service to every home in town. The RFQ specs that baseline level at 6 Mbps download and 1.5 Mbps upload speeds, but companies can structure their responses as they choose. And offer higher levels of service on a commercial basis, if they want.

The City wishes to enter into an extended term contract with one Respondent to provide consistent, reliable access to basic internet service to each housing unit and household (collectively, “Residence”) at a fixed monthly cost to the City. In addition to providing internet service, the selected Respondent must provide continuous bilingual support for the residents, including an informational program to help residents adopt the provided internet service. Acceptance of the internet service will not be mandatory for any resident, but the City expects the selected Respondent to facilitate the acceptance of service by City’s residents. The price to be paid for the internet service is also a key factor for the City.

The concept is analogous to the bulk service deals that private communities often make, except in this case it’s a local government and not a homeowners association that’ll be writing the check every month. The project would be similar in scope to a mid-sized private community – the City of Gonzales has about 1,900 households packed into two square miles.

There is one wireline Internet service provider – AT&T – that serves residents, albeit at speeds that sometimes fall below California’s minimum standard. Even the dumbed down minimum standard adopted by the California legislature earlier this year. Charter Communications is expected to begin offering service at higher levels in the next few months. An open access middle mile fiber line, owned by Crown Castle via its acquisition of Sunesys LLC and largely paid for by the California Advanced Services Fund, runs through Gonzales, connecting to Soledad in the south, and Salinas, Watsonville and Santa Cruz to the north.

Incumbents are welcome to provide quotes, as are competitive Internet service providers.

I won’t try to summarise the RFQ. The meat of it runs about four pages and a lot of work, my own included, went into getting the language just right. Written questions regarding the RFQ can be submitted until 16 November 2017. Responses are due on Cyber Monday, 27 November 2017.

The New York State State Public Service Commission has slapped a $13 million fine on Charter Communications, as punishment for missing broadband expansion requirements attached to regulatory approval of its purchase of Time Warner Cable systems last year. According to a story by Kendra Chamberlain in FierceCable, Charter’s build out in New York fell far short…

The agreement included statewide speed upgrades reaching 100 Mbps by 2018 and 300 Mbps by 2019, and a timeline for building out its broadband network in chunks of over 36,000 new residents and businesses per year, to be completed by 2020.

Charter was able to upgrade broadband service speeds to 100 Mbps across New York ahead of the 2018 deadline set by its agreement, but has been slow to roll out service to new households and businesses. In its first year, Charter passed just over 15,000 new premises, less than half of what it promised.

Charter has similar obligations here in California, albeit without annual targets. The California Public Utilities Commission required Charter to upgrade all remaining analog systems to “an all-digital platform with download speeds of not less than 60 Mbps” within two and a half years, with a bump to 100 Mbps in three years, as well as extending lines to 80,000 new homes and, specifically, to convert its systems in the City of Gonzales and elsewhere in Monterey County to full digital capabilities.

Charter has already upgraded some systems in San Bernardino County, ahead of a threatened fiber to the home project, and already has construction crews in the field in Monterey County. Whether it’s performing to the same level in parts of California where there’s no pressure from competitive providers or motivated local governments is an open question. The first deadline doesn’t come until next year, and the CPUC isn’t likely to begin any enforcement action – or, perhaps, even a due diligence process – on its own before then.

I assisted the City of Gonzales with its efforts at the CPUC and its negotiations with Charter. I am not a disinterested commentator. Take it for what it’s worth.

The residential RFP is ambitious. There are 1,800 homes in Gonzales, which is located in California’s Salinas Valley. The city wants to provide a basic, lifeline-level of service to each one. As the report presented to the council explains…

Staff has been exploring the possibility of entering into a bulk services agreement with a qualified Internet service provider (ISP) to deliver a basic level of Internet access to every home in Gonzales. Although this is a novel approach for a City to take, it is a common method of contracting for service in private communities. There are significant differences between the legal, regulatory and market conditions in cities and private communities, but staff has concluded that distributing a Request for Proposals to qualified ISPs, will clarify those issues and should produce legitimate options that can be implemented.

The second RFP would focus on building out fiber infrastructure in the commercial and industrial areas of the city. A recently completed middle mile project, built and owned by Sunesys/Crown Castle and largely paid for by a grant from the California Advanced Services Fund, runs the length of Gonzales, connecting to a Level 3 facility in Soledad to the south and to several long haul routes in Salinas, Watsonville and Santa Cruz to the north. The city is already in the process of building its own connection to this middle mile fiber, which will be one of the assets on the table when the RFPs are issued.

Naturally, both AT&T and Charter will be invited to submit proposals, along with any other interested ISPs. The two RFPs and more details regarding the financial and technical aspects of the plan are expected to be released later this summer.

Charter is the incumbent cable company in most of the Salinas Valley – the major exception is the City of Salinas, which is Comcast territory. Its Monterey County video franchise areas are stuck in the analog era, with 36 channels of old school, standard definition television that costs an eye-watering $106 per month. No broadband, no digital video.

Long frustrated by a lack of affordable, high speed Internet access – Gonzales is designated a high priority area for broadband development by the CPUC – the city intervened in California’s review process last September, and Monterey County followed in December. Charter has reached settlements with a few of the other intervenors as well, but several organisations remain opposed and are arguing for a variety of benefits, including additional build outs, discounts for low income households (which Charter is already promising) and cash payments. Or they’re urging that the deal be killed completely.

The CPUC’s review is scheduled to be finished in May, with decisions from federal regulators expected in the same time frame.

I’m assisting the City of Gonzales with its efforts at the CPUC and its negotiations with Charter. I am not a disinterested commentator. Take it for what it’s worth.

Under the policy, the assumption is that conduit will be installed any time the city opens up a trench, subject to the public works director’s discretion…

Unless waived by the Public Works Director on the basis of undue burden, or an unfavorable cost-benefit analysis, or the consideration of other relevant factors, Gonzales will install or have installed communications conduit whenever the City undertakes or authorizes the following types of projects:

Maintenance, repaving or other significant work on the above infrastructure.

Excavations for the purpose of installing utilities, including but not limited to communications, electrical, gas, water, waste water, storm drainage.

Other excavations, or work on public property on in the public right of way that provide a similar opportunity to install conduit for future use at a low additional cost.

The policy allows the cost of conduit and related work to be included in project budgets where appropriate. It also includes minimal, default specifications for conduit. Those specs are likely to be temporary, though. The Central Coast Broadband Consortium is working on a complete set of standard specifications for conduit installed on a prospective basis in conjunction with public works projects, i.e. shadow conduit.

Good morning. My name is Stephen Blum, my company is Tellus Venture Associates, in Marina, in Assemblyman Stone’s district. I’m a broadband development consultant and a member of the Central Coast Broadband Consortium. I work for several cities and other regional broadband consortia in California, in both urban and rural areas. I see the divide every day.

I’d like to make three points. First, existing broadband subsidy programs are very much appreciated, but they also are uncoordinated and often work against each other. One example is the money given to schools to upgrade broadband service, both by the federal government and the State of California. The way those programs work now, schools are reimbursed for fiber optic networks to connect campuses. That’s a good thing. But the planning is strictly siloed. The money can only be used to connect schools, and only in the most direct way possible.

It’s as if schools built roads for school buses. What we’d get under the same rules are eight lane freeways leading to schools, while everyone else drives on gravel roads. And only school buses could use those freeways, unless someone else pays to put in extra lanes.

My second point has to do with standards. The federal Connect America Fund will be spending nearly $600 million to upgrade broadband service in rural areas in California. The California Advanced Services Fund, a state program, will also provide hundreds of millions of dollars. Under the federal program, rural service levels are set at 10 Mbps down and 1 Mbps up. The Californian service standard is 6 Mbps down and 1.5 Mbps up. In other words, infrastructure built by one program wouldn’t necessarily meet the standards of the other – failing on either upload or download speeds – and in theory could lead to two overlapping projects, neither meeting the 25 Mbps down and 3 Mbps up standards that the FCC says is the minimum needed by people in urban areas. If the two programs were coordinated, there would, in many cases, be ample money to build systems that meet that higher standard. It’s a standard that’s minimal for people in cities but reckoned too luxurious for rural residents.

Finally, we have to look at the legacy government granted monopolies that are strangling rural areas. One example: Verizon has a legacy phone system that serves Taft, in Kern County. All you can buy there is plain old phone service. No DSL. Another example: Charter Communications has the cable franchise for the Salinas Valley. Just to the north, in Watsonville, for $70, you can get 200 channels of digital TV, with a DVR thrown in, 60 Mbps broadband service and unlimited long distance calling. A few miles south in Gonzales, where household incomes are ten to twenty thousand dollars a year less than Watsonville, which is not a rich community to begin with, all you can buy is 36 channels of 1980s style analog TV for $94 a month.

This kind of redlining of low income rural communities by incumbent telephone and cable companies has to end.

Thank you very much.

Full disclosure: by the time my turn to speak came, it was three hours into the hearing and well past noon. Like most of those still waiting, I opted to submit my comments in writing. Never be the last guy standing between decision makers and lunch: the decision isn’t likely to go your way.

If you live in Watsonville, California, you can go to Charter Communications’ website and find a triple play package that gives you 60 Mbps download speeds, more than 200 channels of television, HD included, a digital video recorder and unlimited long distance calling for as little as $70 a month. There are strings attached at that price point, but it’s still a pretty good deal.

If you live in the Salinas Valley, 40 miles to the south in Gonzales, it’s a different story. That’s Charter territory, too, but the website won’t tell what you can get. For that information, you either to have call or start an online chat with a sales agent. What you’ll learn is…

Charter sales agent: It looks like your address is only analog TV serviceable. Did you want to go ahead and set up TV Basic for $26.99 per month?

Me: How many channels are available?

Charter sales agent: It looks like TV Basic has about nineteen channels.

Me: Can I get any more than that? Any pay per view?

Charter sales agent: It does look like expanded basic is available for $28.00, TMC Analog for $11.95, HBO Analog for $13.95, Showtime Analog for $12.95, and Cinemax Analog for $11.95. Pay Per View would require digital service. Did you want to set up any of these packages or did you have any other questions?

Me: Is that an extra $28, or $28 total?

Charter sales agent: That would be an additional $28 on top of the $26.99 that you are paying for basic.

Me: So the most I could get is 32 channels of basic, plus 4 premium channels? No pay per view, no DVR, no Internet service, no telephone?

Charter sales agent: That is correct, Steve. You are not within the Charter Spectrum or Charter digital footprint at this time. Was there anything else I can help you with today?

Me: Are the 4 premium channels each priced separately, or can I get a bundle of some kind?

Charter sales agent: They are each priced separately, Steve. We do not have a bundled package for them at this time. Did you want to add Charter analog TV services today?

I edited some extraneous Q&A out of that transcript – if you want the full version, just ask in the comments below – but the message is clear.

“The key point for me was that typically that these projects only make a price commitment for two years”, said Commissioner Michel Florio. “In this case the provider has made a commitment for at least five years, maybe as long as fourteen years”.

Pointing out that there are “still more jobs in agriculture” in the Salinas Valley than in an other sector, Commissioner Catherine Sandoval highlighted the acute need for better broadband access in the area, as expressed at public meetings the CPUC held in Salinas last year. “This could be a game changer”, she said. “This is a middle mile project, a back bone that is critical”.

The project will bring low cost wholesale fiber access to Salinas Valley Internet service providers and major commercial and institutional customers all along its route, at a maximum cost of $1,550 per month for any contracts, of any length signed in the first five years. By comparison, unsubsidised dark fiber can cost up to ten times as much. The network will interconnect with major north-south fiber lines in Salinas and Soledad, and terminate in Santa Cruz where Sunesys earlier built a dark fiber connection to Santa Clara, which provides access to several Tier 1 exchanges in Silicon Valley.

Since the Santa Clara connection was built 4 years ago, the price of wholesale Internet bandwidth in Santa Cruz has dropped by a factor of one hundred, to less than a dollar a megabit per month. Cruzio, a local ISP, leveraged this access to light up last mile fiber optic connections for downtown Santa Cruz businesses and improve speed and reliability for thousands of consumers. This new line is expected to do the same for Salinas Valley communities.

Gonzales councilman Robert Bonincontri and city manager Rene Mendez told commissioners of the tremendous need for connectivity in the Salinas Valley, where unemployment rates are high and household income levels are low, even when work is available. The social and economic impact of the project, coupled with its financial viability – demonstrated by the Surfnet proposals, as noted in the approved resolution – was the reason commissioners opted to fund 80% of its construction cost. Normally, CASF grants are limited to between 60% and 70% of the tab.

The next step is to finalise construction plans and route details, with completion expected within two years.

Tellus Venture Associates assisted with several CASF proposals in the current round, including the Sunesys and Surfnet projects, so I’m not a disinterested commentator. Take it for what it’s worth.

A 91-mile fiber optic middle mile network reaching from Santa Cruz deep into the Salinas Valley is back on track, after discussions between the California Public Utilities Commission and Sunesys, LLC – the company applying for the project – led to a $388,000 cut in proposed grant funding.

A revised draft resolution, offered as an alternative by CPUC president Michael Peevey, was posted this afternoon and is scheduled to be considered by commissioners on Thursday. If approved, it would provide a subsidy of $10,640,000 from the California Advanced Services Fund (CASF), which represents 80% of the total project cost of $13.3 million. That’s more than the established limit of 60% to 70% funding, so commissioners would have to agree to an exception to the general rule, based on the significant social and economic impact the project would have in the Salinas Valley.

This latest draft also extends the time frame for guaranteed pricing on the system. Sunesys is a wholesale dark fiber company, which sells to retail Internet service providers as well as large institutional customers. In exchange for the higher subsidy, Sunesys said it would lease a pair of fiber strands along the entire length of the system to all comers for $1,550 per month and keep that price on the table for at least five years, three years more than the CPUC usually requires for CASF projects. According to the draft…

Sunesys has informed [CPUC] staff that it will honor its pricing commitment above for any contract, of any length, if it is signed during the initial five years. For example if in year four, a customer signs a 10 year contract; Sunesys will honor the above pricing through year 14.